No, I'm not lumping dwarves in with "human, elf, half-elf". Elves and Half-elves in many games are visually very similar to humans, sometimes a bit taller sometimes a bit skinnier, but often near indistinguishable apart from the ears. Personally, I'm a big fan of games that make their elves more "weird" so they feel more fantastical - but those are pretty rare. Players who feel uncomfortable self-inserting into races that "don't resemble them" often find that elves and half-elves are close enough to not be a deal-breaker. (This can be seen fairly clearly in the BG3 choices - where elf and half-elf and human all have about the same number of players, but dwarf has significantly fewer players.)

There are plenty of games out there where humans are not "the default" and, yes, I'm largely talking about these. In my initial post I did talk about how this is not so problematic in DnD.

I'm intrigued by your statement "I'll always play a human unless I have a good reason not to, this is because I base my characters about a theme and want the focus to be on that." - Why is it the case for you that you can focus on the story/theme with a human, but not with gnome or an elf or a dwarf? If your theme or stories vary from one human character to another, then race isn't playing into your focus... so wouldn't this also work if your characters were all dwarves?

In my many campaigns of 5e DnD, I've actually now played "gnome wizard" three times. All three were focused around their story and theme, and felt completely different to each other, both in personality, and in the main content of their character and story... The fact that the characters were gnomes wasn't really ever a significant part of their narrative. I don't really understand why this variety or focus would only be possible with humans.

GW2 is indeed a good example of the problem I've been discussing, where the worldbuilding and play experience have a disconnect. It's probably the largest IP where that disconnect is noticeable to regular players.

I have, in fact, played many games where the designers have made humans "bad" or "boring" on purpose to discourage players from that, and even some where they explicitly advertised their games as such - because they want their games to be fantastical. I've played plenty of games where the designers built a bunch of races to populate their universe, and explicitly cut humans out of the game altogether, because they're always viewed as a default if they're included, and they wanted their players to immerse in the worldbuilding they'd made.

I've read fantasy books where the authors have specifically talked about avoiding having "humans" in their setting, because they believe the readers will automatically empathize with the human characters by default, and they wanted complex factional politics where the reader was capable of choosing any of the characters on different sides of a conflict as the one they identified best with.

This does happen in fantasy game design, especially from designers who are more concerned with baking in-depth cultures and variety into their settings. Often these are smaller indie projects with less visibility though.